Public Sector Executive Compensation Reporting Form British Columbia Lottery Corporation Reporting for 09/10

Transcription

1 Public Secto or Executive Compensation Reporting Form British Columbia Lottery Reporting for 09/100 Corporation Statement of Executive Compensation Filed June 7, 2010 Table of Contents Attestation Letter Item 1 General Provisions Item 2 Compensationn Discussion and Analysis Item 3 Summary Compensation Table

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3 Statement of Executive Compensation ITEM 1 GENERAL PROVISIONSS PURPOSE British Columbia Lottery Corporation (BCLC) must disclose all compensation provided to the Chief Executive Officer and the next four highest paid executives for the services they have provided to the organization in accordance with Bill 33. ITEM 2 - COMPENSATION DISCUSSION AND ANALYSIS 1. COMPENSATION DISCUSSION AND ANALYSIS BCLC manages Executive compensation in accordance with the compensationn policy approved by PSEC. Our compensation philosophy is to pay total compensation at the 50 th percentile of our relevant market comparator groups as approved by PSEC, which considers primarily general industry. Compensation principles for Executive compensation include the following: All Executive compensation falls within the PSEC guidelines and supports a performance based culture. Vice President s compensation is aligned and managed below the CEO s total compensation. The Human Resource and Compensation Committee (HR&C) of the Board has the responsibility to review and make recommendations to the Board on the items detailed below, in accordance with corporate governance: The job description of the CEO; The appointment of the CEO; The CEO s performance against agreed upon annual objectives, at least annually; The CEO s compensation; The senior management structure including such duties and responsibilities to be assigned to officers of the Corporation; On the recommendation of the CEO, review and recommend the officers of the Corporation who report to the CEO; The compensation plans for senior management including salary, incentive, benefit and pension plan. Certain matters relating to all employees, including: o the Corporation s broad compensation strategy and philosophy; o new benefit programs or material changes to existing programs; and o material changes to the employee pension plans Ensure succession planning programs for the CEO and Senior Management are in place, including programs to train and develop management; and Provide advice and counsel to the CEO in the execution of the CEO s duties. The Board has final approval on the above matters and the HR&C Committee then ensures decisions are implemented. The objective of the compensation program is to pay competitively with the external marketplace, with a total compensation philosophy to pay and reward for performance. Annual salary increases and incentive pay are based on individual, divisional and corporate performance. Base pay is designed to neither lead nor lag the market. 1

4 Total compensation for the Executive includes base and incentive pay, benefits, pension, supplementary pension, vacation, and perquisite allowance. Following is a descriptor of each total compensation element. Base Pay Base pay is established at the median based on external benchmarking data. Based on the external data, as well as an internal job evaluation system outlining role accountabilities, jobs are valued and slotted within the appropriate salary range. Annual salary increases for the Executive is determined based on individual performance and placement in the range. Incentive Pay * BCLC s short term incentive plan is split between 50% corporate and 50% individual goals and is a variable pay program re-earnable each year. The incentive plan does not pay out any monies (corporate or individual) if corporate triggers are not met. In addition to the short term incentive plan, the CEO is eligible for an annual incentive based on performance of corporate financial goals which is paid on a three year deferral basis. The processs is as follows: The Human Resources and Compensation Committee (HR&C) of the Board reviews and recommends to the Board, the appropriate corporate goals and targets. The Service Plan, which is approved by the Ministry, and the business plan, which is approved by the Board of Directors drives the overall corporate and individual goals set for the Executive. The CEO s goals are determined by the Board of Directors. The CEO s goals are cascaded down to the Executive team and all goals established directly link to the approved business plan. The HR&C Committee reviews the attainment of corporate goals, and the individual goals for the CEO, and recommends to the Board the level of achievement against the target set at the end of the fiscal year. The corporate goals for fiscal 09/10 weree as follows: 1. To provide outstanding gaming entertainment, generating income for the public good: Targets: Net income of $1,130.0 million Net win of $2,030.3 million 2. Build public trust and support for BCLC gaming (as measured by surveys): Targets: Public Support for Gaming 63.0% Public Trust and Confidence in BCLC Games 61.0% Benefit Plan The flexiblee benefit program offered at BCLC provides all employees with an opportunity to purchase benefits based on their lifestyle needs. Employees are provided with preference credits, which are used to purchase medical, extended health, dental, AD&D, life insurance, etc. Long Term Disability premiums are paid for by the employee. The Executive do not have any additional perquisites in this regard. * Incentive pay at BCLC is pensionable. BCLC does not have a long term incentive program. 2

5 Pension BCLC has its own definedd benefit pension plan which is a shared cost between the employee and the Corporation. Employees contribute 4.4% of their monthly earnings that are less than or equal to Year s Maximum Pensionable Earnings (YMPE) and 6.0% of their annual earnings that are in excess of the YMPE. The Corporation contributes additional amounts necessary to pay for the promised pension. An actuary who is certified in the determination of pension funding requirements calculates the amount of the Corporation s contribution. Supplemental Pensionn BCLC has a Supplementary Plan for its Vice-Presidents (the SRP ). The SRP provides a pensionn payable at retirement on or after age 55. The pension is calculated using the formula from the RPP, without Income Tax Act maximum pension limits imposed on the RPP. The excess over the RPP pension is payable from the SRP. In other words, the SRP provides the pension that the Income Tax Act will not allow to be paid from the RPP. The SRP is simply a mirror of the RPP, with two exceptions. The VP does not have to contribute to the SRP. Also, if a VP terminates his employment before age 55, no benefit is payable from the SRP. CEO Supplemental Pension The CEO Supplemental Pension is similar to the SRP for Vice-Presidents with one exception. The CEO receives 1.5 years of pension credit for each year worked. Vacation 20 days of vacation is provided for management staff, including the Vice Presidents. 30 days vacation is provided to the CEO. The maximum accrued vacation provided to management and Executive is 35 days. Perquisitee Allowance A perquisitee allowance is provided to the Vice Presidents in the amount of $1,000 per month. 2. NEW POLICIES, ACTIONS or DECISIONS There have been no new policies, actions or decisions made since the end of the fiscal year that affect a fair understanding of the Executive compensation for 2009/

6 ITEM 3 - SUMMARY COMPENSATION TABLE Name and Principal Position Base Salary 1 Incentive Plan Compensation Earned 2 Pension 3 All Other Compensation 4 RPP SRP Total Previous 2 Years Totals Michael Graydon President & Chief Executive Officer 240,000 56,000 8,295 58,400 20, , /09: $ 370, /08: n/a Scott Norman Vice President, Information Technology 204,820 & Chief Information Officer 33,427 8,295 20,000 22, , /09: $ 291, /08: $ 281,641 Jim Lightbody Vice President, Lottery Gaming 204,646 30,840 8,295 19,700 22, , /09: $ 288, /08: $ 284,177 Kevin Gass Vice President, Corporate Affairs 188,931 33,195 8,295 17,300 22, , /09: $ 260, /08: n/a Marsha Walden Vice President, Customer Strategy & Corporate Marketing 188,434 32,166 8,295 18,000 21, , /09: $ 263, /08: $ 264,426 Vic Poleschuk Former Chief Executive Officer 2008/09: n/a 2007/08: $ 842,201 Dana Hayden Former Interim Chief Executive Officer 2008/09: n/a 2007/08: $ 257,729 Doug Penrose Former Vice President, Finance & Corporate Services 2008/09: n/a 2007/08: $ 336,389 4

7 Notes: Payroll system limitations restrict salary reporting to whole pay periods. The salary reported is for the pay periods of March 29, 2009 March 27, Incentive compensation reported above is for the achievement of 09/10 goals and paid in fiscal 10/11. Mr. Graydon s incentive compensation payment is comprised of annual variable incentive ( $41,502) and a three year deferred variable incentive ($14,498) as per his employment contract. The following assumptions were used in pension calculations. Discount rate Pensionable earnings definition Increases in pensionable earnings YMPE increases Increases in maximum pension permitted under the Income Tax Act Consumer Price Index Mortality Withdrawal Retirement age 6.0% per year *The target bonus percentage is 20% of earnings. Basic salary rate plus target bonus.* 4.0% 3.50% per year 3.50% per year after % per year UP94 projected to year 2015 None Age 62 4 This includes any accrued vacation that is paid, CPP, EI and WCB contributions made by BCLC, employer paid benefits and perquisite allowance. Please note that Mr. Graydon does not receive the Perquisite Allowance. 5